Eris Vespera Hair Color, Body Shape, Family Members, Father, Mother, Brother, Sister, Marriage and Affairs

as the frequency of purchasing, total spending, or the mixture of stores shopped (switching, investigating, comparing, delegating decisions), or ò Characteristicsùsuch as geodemographics for consumers or SIC codes for businesses (health conditions, subsidy status, current coverage status), or ò Attitudesùsuch as financial sophistication, fashion orientation, or disposition to adopt new technologies (interest, optimism). The variables that are used to define the segments are called the "basis." The basis is chosen in light of how the segmentation will be applied. Direct marketers, for instance, carefully dissect their databases in terms of purchase behavior. Other segments are based on consumersÆ motivations and concerns. Marketer choose this because motivations and concerns are what cause consumers to act on an offer. We donÆt think that there is only one "correct" way of doing segmentation research, nor that there is a single set of segments waiting to be "discovered." While the analysis needs to employ objective statistical methods, any number of judgments, preferences and practical considerations go into the design of the process and the final determination of the segment structure. The same dataset can yield different segments. Market segmentation spotlights opportunities for health plans to improve marketing and sales, staff training, customer service, new enrollee intake, business planning, and public relations. It will be used by health plans that want to assure they emerge from this period of dramatic Medicare market change as a coverage provider of relevance and viability. Part of this means achieving sales and marketing goals. Part of this means establishing a market position where consumers think of you as youÆd like them to think of you. Compared to other forms of marketing research, the sample sizes for segmentation studies tend to be large. The simple reason is that you need to be able to profile multiple sub-samples (the segments) with a high degree of precision, rather than just the total sample. It is unusual to use fewer than 500 and not unusual to use 2,000-3,000. Analysis The most complex and opaque part of segmentation research is the derivation of the segmentsùthat literally means dividing the sample into a small number of exclusive clusters. This is almost always done by applying some form of statistical cluster analysis. The analyst will typically try several different cluster "solutions." While there are objective statistical

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